US Says It Aims to Cut Trade Deficits Through Nafta Revamp

Jul 19, 2017, 00:24
US Says It Aims to Cut Trade Deficits Through Nafta Revamp

The U.S. Trade Representative said a revamped NAFTA must include provisions to eliminate unfair subsidies and give the United States broader authority to crack down on an influx of cheap products. It calls for more opportunities for American suppliers for government procurement overseas, such as construction projects, but in the next breath, it insists on preserving Buy American rules that limit such rights for foreigners.

USTR released the NAFTA negotiating objectives as required prior to the start of the talks, which will be held under a pressing political timeline due to elections next year in the USA and Mexico.

NAFTA talks are expected to begin on or around August 16.

Under sanitary and phytosanitary (SPS) measures, USTR said they want to "provide for enforceable SPS obligations that build upon WTO rights and obligations, including with respect to science based measures, good regulatory practice, import checks, equivalence, and regionalization, making clear that each country can set for itself the level of protection it believes to be appropriate to protect food safety, and plant and animal health in a manner consistent with its global obligations". Canada, though, feels the language is more directed at Mexico, which runs a large trade surplus with the United States, said a source familiar with Canadian government thinking.

The Liberal government is now accepting input from the public on a renegotiated deal, asking what elements of NAFTA should be preserved, what should be improved and what new issues need to be addressed to modernize the 23-year-old agreement.

Lighthizer was required to notify Congress by Monday of the administration's objectives for renegotiating the North American Free Trade Agreement with Mexico and Canada.

While the USA has been open about concerns with NAFTA, Canadian political leaders have been largely silent on what they want from the upcoming talks.

"The negotiating objectives also include adding a digital economy chapter and incorporating and strengthening labor and environment obligations that are now in NAFTA side agreements", the USTR said in a written statement that accompanies the report.

At home, it has received some 12,000 written submissions and consulted extensively with some 450 stakeholders, primarily management and labour in the industry sectors most dependent on maintaining an open border with the US _ automotive, aerospace and food processing sectors among them.

"President Trump continues to fulfill his promise to renegotiate NAFTA to get a much better deal for all Americans", Lighthizer said in a statement.

Trump has called NAFTA the "worst deal ever" and has threatened to leave the agreement.

The U.S. goods trade deficit with Canada was $12.1 billion in 2016 while the USA services trade surplus was $24.6 billion past year. But it adds that deal "created new problems for many American workers", coinciding with the explosion of US trade deficits and the reduction of manufacturing.

In agricultural products, the report outlines several areas where the administration seeks to improve the trade deal. But Chapter 19 allows a foreign country, like Canada, to appeal this decision before a panel made up of officials from both countries.

"This document does not describe the promised transformation of NAFTA to prioritize working people that some voters were expecting based on President Trump's campaign pledges".

"Today is D-day for some of us who have been talking about this for a long time", said U.S. Rep. Regardless, the Canadian dairy industry is likely to fight fiercely against them.

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